sign in sign up
<<
Home , Rick Husband

March 27, 2003 CONGRESSIONAL RECORD — SENATE S4475 The PRESIDING OFFICER. Without state of Ohio serving in our military and way of life here at home, but also objection, it is so ordered. today. My wife, Fran, and I pray for all to promote those ideals abroad. Mr. FRIST. I ask unanimous consent of them and their families—we pray Mr. President, this entire military that the tributes to Daniel Patrick that they will be safe, wherever they tax package is an important sign of Moynihan, the late Senator from New are and in whatever capacity they are support for those called to serve, as York, be printed as a Senate document, working. Many of these courageous well as their families. I urge my col- and that Members have until 12 noon, men and women are in Iraq right now. leagues to support it. Friday, April 11, to submit said trib- Four of them from Ohio have been in- I thank the Chair and yield the utes. jured or are listed as missing. Both Floor. The PRESIDING OFFICER. Without Army CPT Gregory Holden from Mr. BAUCUS. I suggest the absence objection, it is so ordered. Huron, OH, and Marine Corps Sgt. Jose of a quorum. f Torres from Lorain, OH, have been in- The PRESIDING OFFICER. The jured in the war. And Army PVT Bran- clerk will call the roll. MEASURES PLACED ON CAL- don Sloan from Bedford Heights, OH, The bill clerk proceeded to call the ENDAR—S. 711, S. 712, S. 718 and S. and Marine Corps MSgt Robert Dowdy roll. 721 from Cleveland are listed as missing. I Mr. BAUCUS. Mr. President, I ask Mr. FRIST. Mr. President, I under- would like their families to know that unanimous consent that the order for stand there are four bills at the desk we are praying for them. We pray for the quorum call be rescinded. which are due for a second reading. I their recovery and their safe return The PRESIDING OFFICER. Without ask that it be in order to read the ti- home. objection, it is so ordered. tles of the bills en bloc. Mr. President, as we debate the mer- Mr. BAUCUS. Mr. President, thou- The PRESIDING OFFICER. Without its of this bill, I would like to take a sands of men and women from Montana objection, it is so ordered. moment to discuss a specific provision are currently stationed overseas, be it The clerk will state the bills by title. that I have worked on for more than in Iraq, Afghanistan, South Korea, The legislative clerk read as follows: two years—and that is a provision that Southeast Asia or in other supporting A bill (S. 711) to amend title 37. United would allow our National Guard and missions throughout the United States States Code, to alleviate delay in the pay- Reserve members to take deductions and the rest of the world. ment of the Selected Reserve reenlistment for travel expenses incurred getting to These brave and dedicated soldiers bonus to members of Selective Reserve who and from duty assignments. This ini- have chosen to join the Armed Forces are mobilized. tiative stems from legislation I first and protect our country, which is one A bill (S. 712) to amend title 10, United of the highest forms of service there is. States Code, to provide Survivor Benefit introduced two years ago, and then again this past January. They are putting their lives on the line Plan annuities for surviving spouses of Re- to protect the freedom and security of serves not eligible for retirement who die Specifically, the provision would pro- from a cause incurred or aggravated while on vide a tax deduction for overnight trav- the United States. I take my hat off to inactive-duty training. el costs incurred more than 100 miles them. A bill (S. 718) to provide a monthly allot- from the taxpayer’s home. These ex- To date, Montana has sent almost 700 ment of free telephone calling time to mem- penses include meals, transportation, Reserve forces into Active Duty. bers of the United States Armed Forces sta- and lodging up to the amount allow- Malmstrom Air Force Base has 105 air- tioned outside the United States who are di- able under Department of Defense per men deployed overseas, including 50 rectly supporting military operations in Iraq diem allowances. members of the 819th Red Horse Squad- or Afghanistan. ron. Earlier this month 114 members of A bill (S. 721) to amend the Internal Rev- Mr. President, this provision is a enue Code of 1986 to expand the combat zone positive step in the right direction, as the Red Horse Squadron came home income tax exclusion to include income for approximately 225,000 Reservists and after being deployed in southwest Asia the period of transit to the combat zone and Guardsmen incur significant out-of- for five and a half months. The airmen to remove the limitation on such exclusion pocket expense—expenses that often are supporting six different operations for commissioned officers, and for other pur- match or even exceed their military around the world in southwest Asia, poses. take-home pay. supporting no-fly zones in Iraq or in Mr. FRIST. Mr. President, I ask The restoration of the tax deduct- Afghanistan. unanimous consent that the Senate ibility of these expenses would help al- About 390 Army Reservists from proceed en bloc to the measures, and I leviate the personal and financial costs Montana have been deployed. From object to further proceeding en bloc. of these individuals’ patriotic efforts. Great Falls, the 889th Quartermaster The PRESIDING OFFICER. Objec- And, quite frankly, our servicemen and Company unit—with 119 members—re- tion having been heard, the bills will be women should not be put in the posi- cently received mobilization orders placed on the calendar. tion of subsidizing their own training. along with 100 members of the 4225th f I thank Chairman GRASSLEY, Senator U.S. Army Hospital. BAUCUS, and the Finance Committee From Missoula, 58 soldiers from the ARMED FORCES TAX FAIRNESS for working with my office to include 279th Engineer Battalion and 16 sol- ACT OF 2003—Continued my provision. I also would like to diers from the 823rd Transportation De- Mr. DEWINE. Mr. President, I rise thank Senator MCCAIN and my 61 col- tachment have been activated. And out today to share my strong support for leagues who co-sponsored this legisla- of Billings, 161 members of the 592nd this much needed and much deserved tion with me last year. The incredible Ordnance Company recently received military tax package. I commend number of bipartisan co-sponsors dem- their orders. Most of these army Re- Chairman GRASSLEY and my many col- onstrates the widespread support our servists will take part in Operation En- leagues who have worked so hard on legislation carries, as well as the tre- during Freedom. this bill for such a long time. As we all mendous support we all share for our Montana’s has know, this tax package is long overdue. troops. also contributed significant human re- As my colleagues know, the Armed Mr. President, we owe these brave sources. 210 members of the 120th Forces Tax Fairness Act of 2003 would Americans our thanks and our deep Fighter Wind have been activated fly- provide critical tax relief to our service and abiding gratitude for their service ing in the no-fly zone over Iraq. men and women. Specifically, this bill and dedication to our country and all Montana’s Army National Guard has would remedy several tax problems that it represents. Whether in the contributed about 125 Army Guard that unfairly penalize the men and streets of Baghdad, the deserts of Ku- members, many of which are at other women serving in our military and wait, or the caves of Afghanistan, we bases throughout the United States Foreign Service. Certainly now, more must never forget those men and taking part in Homeland Security than ever, we must correct these in- women, who serve to uphold the ideals measures. equities. It is the right thing to do. of our great Nation. Thirty-five members of the 443rd Pe- Mr. President, there are many serv- They have sacrificed so much not troleum, Oil and Lubricants Supply ice men and women from my home only to protect our freedom, liberty, Company have been mobilized to assist

VerDate Jan 31 2003 05:17 Mar 28, 2003 Jkt 019060 PO 00000 Frm 00017 Fmt 0624 Sfmt 0634 E:\CR\FM\G27MR6.030 S27PT1 S4476 CONGRESSIONAL RECORD — SENATE March 27, 2003 with base security at the 120th Fighter There being no objection, the mate- land and Virginia. They have guarded al Wing unit on Gore Hill outside of Great rial was ordered to be printed in the Qaeda and Taliban detainees from Afghani- Falls, MT. Forty-five soldiers from the RECORD, as follows: stan at Guantanamo Bay in Cuba and pa- trolled Iraq’s no-fly zone. Now, area troops 495th Transportation Battalion are [From the Washington Post, Mar. 4, 2003] are getting ready to set up refugee camps in taking part in Operation Enduring CALLED-UP RESERVIST TAKE BIG HIT IN WAL- northern Iraq and to transport equipment to Freedom. Eight ground-air liaison LET; FAMILIES STRUGGLE ON MILITARY SAL- the front lines. In the Maryland National teams are in Fort Sill, OK, and 2 UH60 ARY Guard, 3,000 of 8,000 members have been Helicopter pilots are in Fort Benning, Spring should be the busy season for the called up since Sept. 11, 2001. GA. Brinkers’ Columbia home improvement busi- ‘‘The military can’t conduct a war without Most certainly, I do not want to for- ness. But instead of cashing in on the jobs the National Guard and reserve compo- get the thousands of Active Duty that will come up as the weather improves, nents,’’ said Maj. Charles Kohler, a spokes- Army, Navy, Air Force and Marines Lynn Brinker is calling customers to cancel man from the Maryland National Guard. thousands of dollars’ worth of work. Green’s unit probably will be placed some- from Montana stationed elsewhere It was less than five months ago that her where in the Middle East, he said. He doesn’t throughout the Nation and overseas. husband, Sgt. Mark Brinker, an Army re- yet know where, but it will be a world away These soldiers are sons and daugh- servist with the 400th Military Police Bat- from his civilian life, where he has two chil- ters, brothers and sisters, fathers and talion, returned from a year-long, post-Sept. dren and is in charge of Sears deliveries in mothers. And like you and I, they have 11 deployment to Fort Sam in Maryland. While on active duty, he expects families to take care of and worry . To get through that tour, Lynn to lost about $1,000 a month, the equivalent about. They have personal lives to at- Brinker cashed in savings bonds meant for of his monthly mortgage payment. tend to, bills to pay and tax forms to the education of their three children, took Green was called up during the Persian out a bank loan and borrowed $15,000 from a Gulf War, and this time around, he thought fill out. As they are stationed far away, relative. he knew how to prepare. But still he was they are worried about how their chil- Now, mark has been called up again, this caught somewhat off guard. dren are doing in school and how their time for the impending war in Iraq, and she ‘‘You try to put a few dollars away in case husbands or wives are coping with the doesn’t know what they’re going to do. of an emergency,’’ he said. ‘‘But this isn’t an distance. It is not easy. ‘‘There is just no way we can make ends emergency; this is a crisis.’’ Every day they are putting their meet with him gone again,’’ she said, ‘‘It’s Now, he’s praying for two things: ‘‘I hope lives back here on hold and instead just ridiculous. We’re in our forties, we’ve we win the lottery, or at least that our car worked hard, and we didn’t expect to have to doesn’t break down.’’ putting their lives on the line to pro- be starting all over again like this.’’ His fiancee, Wanda Jones, will have to tect the rights we hold so dear. As the Pentagon continues to activate re- work overtime at her pharmaceutical com- With all of the worries they are fac- serve and national Guard troops, some of the pany job to help make up the difference. And ing, I am urging for passage of the biggest sacrifices are being made on the they’ve already had a conversation about fi- military tax bill so we can take one, or home front. In addition to risking their nances when he’s gone. two, burden off of their minds. lives, many soldiers, sailors, airmen and Ma- ‘‘I’m going to cut out shopping at the These men and women should not rines are risking their livelihoods, leaving mall,’’ she said. have to worry about whether or not civilian jobs that pay much better than the Some firms continue to pay troops on ac- tive duty, or at least to make up the dif- their deployment changes their resi- military. Families are selling second cars, canceling vacations and postponing paying ference between military and civilian pay. A dency for tax purposes. They should bills as they steel themselves for drastic re- survey by the Reserve Officers Association of not have to worry about whether or not ductions in income. the United States found that of the 154 For- they can afford their weekend training, For the reservist on inactive status, the tune 500 corporations that responded to a nor should they ever have to worry duty can be a welcome source of extra cash. query, 105 make up the differences in pay. about whether their death could result A private with less than two years’ experi- Last year, just 75 of 132 responding compa- in an undue tax burden to their family. ence can pick up $2,849 a year for one week- nies did so, and in 2001, the number was 53 of One of the best ways we can support end a month of drilling and an annual two- 119. Army Reserve Sgt. Jeffery Brooks, a fraud our troops is by doing everything we week training exercise. A staff sergeant with six years can get $4,628. With a call to active detection manager from Woodbridge, said his can to ensure that they and their fami- duty, the pay bumps up—$16,282 for a private company, Capital One, has agreed to pay him lies are taken care of. As a tribute to first class and $26,448 for the staff sergeant, the difference. Otherwise, he would be losing our Armed Forces, I cannot think of a which is tax-free while the military member 42,200 a month. ‘‘I’d be in real trouble,’’ he better way to support them than by is in a combat zone. said. passing the military tax bill and allow- There are other benefits. Mortgage and Daniel Ray, editor in chief of ing them to focus on their mission credit card rates are reduced. In some cases, bankrate.com, an online financial informa- rather than their finances. the law prohibits landlords from evicting tion service that helps reservists, said many people are not so lucky. ‘‘Those are generous I encourage my colleagues to show military families even if they haven’t paid rent. And employers are required to take re- bosses to have,’’ Ray said. ‘‘But if you’re their support for our troops today by servists back once they return from duty, self-employed, or you’ve built up your prac- voting in favor of the Armed Forces with no loss in pension benefits or seniority. tice over the years, it can be very hard. Tax Fairness Act. But the package comes nowhere near mak- When you go away, your practice dries up. Ms. LANDRIEU. Mr. President, I ing up for many civilian salaries. Then it doesn’t just affect you but your sec- know that my friends and colleagues, The reservists are volunteers, of course. retary and the people who rely on you.’’ Senator GRASSLEY from Iowa and Sen- They have been reminded repeatedly that ac- Not everyone takes a financial hit. Army tive duty could come at any time. But many Reserve Lt. Orlando Amaro would make the ator BAUCUS from Montana, share my say they signed up for the several thousand same amount guarding a POW camp in Iraq concerns about the safety and welfare a year in extra pay and other perks, not for as he does as a D.C. police officer patrolling of our troops in the field and their fam- war. the streets of Columbia Heights. If he is ilies at home. With the deployment of ‘‘I thought I could get some money for shipped overseas, where his income wouldn’t the 389th Engineer Battalion and the school,’’ said Spec. Robert Moore of Pasa- be taxes, he may come out ahead. 106th Aviation Unit from the Iowa dena, who spent a year on active duty with ‘‘It won’t affect me at all,’’ he said. Guard and 495th Transportation Com- the Army’s 443rd Military Police Company Lynn Brinker isn’t thinking about coming pany and 411th Support Detachment after the Sept. 11, 2001, terrorist attacks and out ahead. She may sell the Chrysler she and her husband recently bought. She wants des- from the Montana Guard, no one can was shipped off again last week for training at Fort Lee, Va.—most likely a prelude to perately to let her 12-year-old son, Chris, doubt that the people of the Hawkeye deployment overseas. ‘‘I think most people continue private viola lessons, and for Kevin, and Big Sky States are making very just thought: ‘We’re just the reserves. We’re 10, to keep up with the trumpet. She wonders important contributions to our na- not going anywhere.’ ’’ whether she’ll be able to afford the registra- tional defense. Sgt. Kevin Green hears similar comments tion fees and equipment for youth hockey in However, I wonder if my friends saw from his Army National Guard troops in the the fall. the article in the Washington Post on 1229th Transportation Company. ‘‘My thinking is we’ll tap this line of credit March 4, entitled ‘‘Called-Up Reservists ‘‘They don’t want a weapon in their hands, and try to keep my kids’ lives as normal as riding around in another country, worried possible while their father is away. It’s very Take Big Hit in Wallet; Families that they won’t come back,’’ he said. traumatic for them,’’ she said. Struggle on Military Salary.’’ I ask As of last week, 168,083 reserve and Na- ‘‘People may say, ‘Well, he signed up for unanimous consent that this article be tional Guard troops were on active duty, in- this. You knew this could happen.’ But he printed in the RECORD. cluding thousands from Washington, Mary- was away for an entire year, and then leaves

VerDate Jan 31 2003 05:17 Mar 28, 2003 Jkt 019060 PO 00000 Frm 00018 Fmt 0624 Sfmt 0634 E:\CR\FM\A27MR6.014 S27PT1 March 27, 2003 CONGRESSIONAL RECORD — SENATE S4477 four months later. And now we don’t know Mr. BAUCUS. I share the sentiments vidual expatriation. According to the how long he’ll be gone. I don’t think he of Chairman GRASSLEY. I would sup- Joint Committee, there is virtually no signed up for that.’’ port tax treatment for our Guardsmen enforcement of the special tax and im- Ms. LANDRIEU. This Post story cap- and Reservists like that proposed by migration rules applicable to tax-moti- tures the reality of reservists who are Senators LANDRIEU, DEWINE, and vated citizenship relinquishment and called to war and are asked to make ALLEN. S. 351 is not the appropriate residency termination. the double sacrifice of enormous pay venue, but the reconciliation package The Joint Committee also said that cuts to serve their country. present law has been highly ineffective. Because of stories like these in my should achieve the goals of S. 442. The Present law continues to provide tax home State, and across the country, I junior Senator from Louisiana is cor- introduced S. 442, the Reservists and rect that the $350 billion tax package incentives for individuals to expa- Guardsmen Pay Protection Act. This should contain both tax cuts to pro- triate. It also is difficult to collect U.S. bill would provide a tax credit to em- mote growth and benefit the quality of taxes on former citizens who are no ployers who take the patriotic step of life for the men and women in the longer physically present in the United covering the difference between their United States Armed Forces. States. employee’s pay and as a civilian, and Ms. LANDRIEU. Mr. President, I ap- Additionally, a study conducted by their pay as a soldier. The tax cut preciate the chairman’s offer and the the General Accounting Office con- would cover 50 percent of the amount, ranking member’s offer, and look for- cluded that the IRS did not have a sys- and last for 1 year. Additionally, the ward to working with them to include tematic compliance effort. That means Senate just passed a budget resolution this important legislation in the rec- that we are not even enforcing the al- that calls for $350 billion in tax cuts onciliation bill this year. ternative tax regime that is on the over 10 years. Certainly, we should en- Mr. BAUCUS. I suggest the absence books. sure that there is room in this tax cut of a quorum. That means a former citizen could to both promote economic growth and The PRESIDING OFFICER. The avoid the alternative tax regime by benefit the men and women in uniform clerk will call the roll. holding foreign assets—which are not willing to risk their lives in defense of The bill clerk proceeded to call the taxed. Or by waiting until the 10-year this great Nation. roll. period expires before disposing of U.S. As the chairman and ranking mem- Mr. BAUCUS. Mr. President, I ask property. ber know, I have been a strong sup- unanimous consent that the order for The Armed Forces Tax Fairness Act porter of Senate Bill 351, the Armed the quorum call be rescinded. includes a new system to address tax- Forces Tax Fairness Act. It contains a The PRESIDING OFFICER. Without motivated expatriation. Under this leg- provision that I introduced as separate objection, it is so ordered. islation, any U.S. citizen or long-term legislation relating to dependent care Mr. BAUCUS. Mr. President, earlier I resident who relinquishes their U.S. benefits for military personnel, and I paid tribute to Senator Daniel Patrick citizenship or residency will be subject very much appreciate Senator GRASS- Moynihan. There is a provision in the to an exit tax on the gains attributable LEY’s and Senator BAUCUS’ effort to in- legislation we are considering which to property owned during their U.S. clude these provisions in the bill. was very near and dear to the heart of citizenship. However, I think it would be a ter- Senator Moynihan, and that is the ex- Under this proposal, if the gain ex- rible mistake to ignore this looming patriation provision contained in this ceeds $600,000, then a former citizen question that affects so many Reserv- bill. It was actually developed by Sen- will be taxed on the net unrealized gain ists and Guardsmen, especially after ator Moynihan and Senator Roth sev- on property—as if it were sold at fair agreeing to $350 billion in tax cuts. S. eral years ago. That is the genesis of market value 1 day prior to expatria- 442 is both stimulative and necessary this provision. tion. The Treasury Department be- for the men and women on the front As we know, there are many men and lieves that this new system will great- lines, as well as their families back at women overseas fighting for our coun- ly improve the administrability of the home. So, I ask my friends, the distin- try. For example, there are currently tax on expatriates. The new system im- guished chairman and ranking member about 300,000 in Iraq. At the same time, poses the tax at the time the individual of the Senate Finance Committee, can there are individuals who attempt to leaves the U.S. jurisdiction. anything be done to address this prob- escape their patriotic duty. While we Additionally, by including foreign as- lem? have 300,000 men and women over in sets within the regime, this eliminates Mr. GRASSLEY. I thank the junior Iraq, other individuals are attempting a significant incentive for tax-moti- Senator from Louisiana for her bring- to escape their patriotic duty. They re- vated expatriation. ing this important issue to the com- linquish their U.S. citizenship. Why? This expatriation provision will raise mittee’s attention. The Congress has One basic reason: In order to avoid sup- $700 million. The military bill uses that an obligation to see to the well being of porting the United States through $700 million to provide tax benefits to the men and women who are defending taxes. military personnel. this Nation even now. For these rea- Between 1991 and 2002, approximately In contrast, the House version of the sons, the committee has adopted S. 351, 6,500 U.S. citizens have expatriated; military bill is simply a modification and we would like to pass that legisla- that is, they gave up their U.S. citizen- of the current alternative tax regime. tion immediately. I know it contains ship. In 1966, as part of the Foreign In- It raises $328 million. The House provisions of deep interest to the Sen- vestors Tax Act, Congress created an version will not go far enough. It sim- ator from Louisiana, and she would alternative tax regime for U.S. citizens ply adds more provisions for the IRS to agree that the sooner they are enacted who expatriated in order to avoid pay- enforce. This strikes me as odd consid- the better. However, I share her con- ing taxes. The alternative tax regime ering none of the current provisions is cern about the need to take whatever taxes a former citizen on U.S. property being enforced. steps we can to support our troops and for 10 years after expatriation. Sometimes the laws just do not work their families. For a variety of reasons, These tax rules were strengthened in the way Congress intended. So, we I do not believe that the S. 351 is the 1996 following press reports and con- must change the laws to ensure they correct vehicle to address this problem. gressional hearings indicating that are effective and administered as Con- I do recognize that the issue appears to very wealthy individuals expatriated gress intended. have drawn broad support as similar while maintaining significant contacts The current system to tax expatri- proposals have been introduced by Sen- with the United States. ates does not work. We have had nearly ators DEWINE and ALLEN. I say to my Unfortunately, these changes to the 40 years to make the system work. We friend from Louisiana, I will work with law have not deterred citizens from ex- should not wait any longer to collect her and Senators DEWINE and ALLEN on patriating to avoid paying U.S. taxes. taxes on those who do not value the including the Reservists and Guards- The changes simply never worked as freedoms our nation provides. men Pay Protection Act in the rec- Congress intended. The new proposal does not seek to onciliation package that we will bring This year, the Joint Committee on tax expatriates on income earned after to the floor soon. Taxation published a study on indi- expatriation. It just says they have to

VerDate Jan 31 2003 05:17 Mar 28, 2003 Jkt 019060 PO 00000 Frm 00019 Fmt 0624 Sfmt 0634 E:\CR\FM\A27MR6.017 S27PT1 S4478 CONGRESSIONAL RECORD — SENATE March 27, 2003 pay tax on the income earned while hancing the compensation of Active- Mr. BAUCUS. Mr. President, I yield they were a U.S. citizen. While our Duty, Reserve, and National Guard per- whatever time the Senator from Ar- military protected them. sonnel, and their families. kansas desires. I thank former Senator Bill Roth and In the Armed Services Committee, The PRESIDING OFFICER. The Sen- the late Senator Daniel Patrick Moy- we also are engaged in such an effort ator from Arkansas. nihan, who developed this proposal sev- and we do it annually. I assure my col- Mr. PRYOR. Mr. President, I ask eral years ago. And I thank Senator leagues that in connection with the fis- unanimous consent that I may speak HARKIN and others who have continued cal year 2004 Defense Authorization for up to 5 minutes on the pending bill. to work on this in the 107th Congress Act, we do our utmost to make sure The PRESIDING OFFICER. Is there and this year. every aspect of pay and benefits is objection? Without objection, it is so ordered. AMENDMENT NO. 433 closely examined. With respect to the legislation before Mr. PRYOR. Mr. President, in these (Purpose: In the nature of a substitute) the Senate, I am particularly pleased halls we often talk about the need to On behalf of Senator GRASSLEY and to support the provision of capital provide our military personnel with myself, I call up amendment numbered gains relief to military homeowners in the resources they need to complete 433. connection with the sale of their resi- their missions. We all acknowledge The PRESIDING OFFICER. The dence. This relief, which recognizes re- how unique and important our military clerk will report. alities of military service, is long over- personnel and their needs are to us. The bill clerk read as follows: due. It is our responsibility to have a The Senator from Montana [Mr. BAUCUS], Senator MCCAIN introduced legisla- comprehensive picture to know what for Mr. GRASSLEY, and Mr. BAUCUS, proposes tion last year, S. 1678, and I was happy we need to do to make life better for an amendment numbered 433. to be a cosponsor and sought to achieve our men and women in uniform. By Mr. BAUCUS. I ask unanimous con- this purpose with him and others. I that I mean not only salary but that sent reading of the amendment be dis- also view as particularly timely and we need to understand their health pensed with. well justified the provisions that are care needs, their housing needs, pen- The PRESIDING OFFICER. Without above-the-line tax deductions to Re- sion needs, education needs, disability objection, it is so ordered. serve and National Guard personnel and employment benefits. It is very (The amendment is in today’s who incur out-of-pocket expenses as a important, as we work in Iraq and RECORD under ‘‘Text of the Amend- result of training operations and those around the world and as we keep Amer- ment.’’) benefiting the families of the Space ica safe, that we, as Congress, have this The PRESIDING OFFICER. The Sen- Shuttle Columbia heroes. important information. ator from Virginia. It is fitting as hundreds of thousands Not long ago, I was in a hearing of the Armed Services Committee, of Mr. WARNER. Mr. President, I rise of our military personnel—and many which I am a member, and we began in strong support for this piece of legis- are engaged not only in the battle in discussing the home mortgage deduc- lation. I compliment my long-time Iraq but Afghanistan, which our group tion. One thing I realized was the home friend, the Senator from Montana, for recently visited, and other trouble mortgage deduction is a very impor- his work. We have enjoyed many spots of the world—that the Senate tant part of America’s financial pic- projects together over the quarter of a recognize their contributions to free- ture, but also it is an important cor- century, and our distinguished Senator dom and the sacrifices they and their families make. nerstone to the American way of life. GRASSLEY has taken a strong hand, as As I thought about the home mort- always, on matters regarding revenue There are roughly 290 million citizens in this country. There are on active gage deduction for military personnel, and also the Armed Forces of the I realized that the Tax Code is cum- United States. duty today about 1.5 to 1.6 million indi- viduals. The normal standing force of bersome and complicated. I could not If I had named this bill, I would have find one place, one document, that laid called it the Armed Forces Family Tax the active forces of the United States runs about 1.2 to 1.3 million. Now with out all the provisions in the Tax Code Fairness Act of 2003 because as I have designed to benefit our military per- studied this legislation and made some the augmentation of so many being called in the Reserve and the Guard to sonnel. contribution to the text of it, I have al- active duty, that is somewhat larger. And on comes the military tax bill, ways had in mind the families of the However, that group represents only this very important piece of legisla- men and women of the Armed Forces one half of 1 percent, roughly, of the tion. I commend Senator GRASSLEY and and others who serve in the cause of population of 290 million citizens in Senator BAUCUS for all their hard work freedom for our citizenry the world this country. on this bill. But I looked, and I saw a over, who take enormous risks and, We should always be mindful that so maze of Tax Code provisions, mainly frankly, accept the hardships which for many are on active duty, particularly for short-term solutions. Those are im- those who would lead sort of a normal those engaged in armed combat, those portant, there is no question about it. life are hard to understand. who are on the television screens 24 But still, I could not find a comprehen- Traveling about the world, most re- hours a day now, assuming these cou- sive view of tax treatment for our cently with Senators LEVIN and ROCKE- rageous roles they are taking in com- Armed Forces. FELLER and my colleague from Kansas, bined forces, trying to free the Iraqi So what I am proposing is very sim- covering that area in Pakistan and people of the bondage of these many ple and very clear; that is, I would like Qatar, Kuwait, we saw firsthand the years and to remove the weapons of to ask the GAO and the Departments of brave men and women not only in uni- mass destruction which threaten the Defense and Treasury to provide us form but the agency staff and others very Members who occupy this Cham- with a comprehensive study of the tax who hopefully will benefit from this ber from time to time. If those mass treatment of U.S. military personnel, legislation. weapons spread throughout the world along with a complete study of the fi- I compliment my two colleagues on through the net of terrorism, small nancial conditions of our troops. And I their timely action in extending these quantities of biological and other types would request they make recommenda- tax benefits to military and Foreign of weapons of mass destruction could tions on whether the Tax Code could be Service personnel and to the families reach our shores and, indeed, inflict used to improve the unique financial of the Columbia astro- enormous harm against our people. conditions of our troops. nauts. This is a very small group, less than This powerful information will help At this historic moment in history, 1⁄2 percent, who take these risks to pre- this Congress, help this administra- with Operation Iraqi Freedom in serve the freedoms and give us a great- tion, and also help our men and women progress, it is fitting we take every op- er sense of security here at home. in uniform. This one document could portunity to express appreciation we I hope this bill receives 100 votes. I be a very powerful tool for us to help have for our men and women in uni- thank those who made it possible. our men and women in uniform. form. Certainly one way to do that is The PRESIDING OFFICER. The Sen- However, at this juncture, I do not to place a priority on legislation en- ator from Montana. want to slow down, in any way, this

VerDate Jan 31 2003 05:17 Mar 28, 2003 Jkt 019060 PO 00000 Frm 00020 Fmt 0624 Sfmt 0634 E:\CR\FM\A27MR6.019 S27PT1 March 27, 2003 CONGRESSIONAL RECORD — SENATE S4479 very important bill on which Senator U.S. Navy CDR , Dr. disrupt and dismantle the financial GRASSLEY and Senator BAUCUS have , U.S. Air Force COL components of terrorist organizations. spent so much time. I support their ef- Rick Husband, Naval CDR William Special agents from the IRS and forts to move this bill through quickly. McCool, and Israeli Air Force COL Ilan other law enforcement agencies have We all understand how important that Ramo´ n will be remembered forever. successfully investigated numerous is. Five of the six Columbia crew mem- terrorist related entities—including Therefore, I am not asking that my bers, from the United States, had mili- tax exempt organizations that have en- amendment be adopted. But what I am tary backgrounds. They were national gaged in terrorist fundraising. asking, very respectfully, is that Sen- heroes who are deeply missed by their The Armed Forces Tax Fairness Act ators GRASSLEY and BAUCUS join me in family and friends. Through their dedi- of 2003 contains a provision that would a letter asking the GAO to do what our cation to space exploration, they lived suspend the tax-exempt status of any amendment otherwise would accom- their lives to the fullest and made long organization designated by U.S. au- plish. I thank them for their hard lasting contributions. thorities as a terrorist organization or work, and I thank them for their lead- In honor of their sacrifice, I along supporter of terrorism. ership on these very important issues, with 13 of my Senate colleagues, intro- There is no procedure under present issues the American people are very duced S. 298, the Assistance for Fami- law for the IRS to suspend the tax-ex- concerned with, and issues on which lies of Heroes empt status of an organization. they have shown great leadership. Act. The IRS can revoke an organization’s The PRESIDING OFFICER. The Sen- I am pleased that the legislation was tax-exempt status only after con- ator from Montana. included by the Senate Finance Com- ducting an examination of the organi- Mr. BAUCUS. Mr. President, that is a mittee as part of the Armed Forces Tax zation. very important statement and request Fairness Act of 2003. Even then, the IRS must issue a let- that the Senator from Arkansas has Under the legislation, the families of ter proposing revocation and allow the made. I can speak on behalf of myself, the Columbia heroes would receive the organization to exhaust its administra- and I am sure Senator GRASSLEY, that same benefits as families of military tive appeals rights. we would be more than honored to join personnel who die in the line of duty. The provision in this legislation is The provisions are similar to legisla- with the Senator from Arkansas in simply common sense. It is an impor- tion passed in 2001 that provided relief making that request. It is a very time- tant weapon in our war on terrorist fi- to victims of the September 11, anthrax ly request. It is one that is very impor- nancing. and the Oklahoma City attacks. tant. Frankly, I am a little bit sur- An organization that has been des- Specifically, the bill expands the prised none of us made that same re- ignated by the Federal Government as class of those eligible for these benefits quest that he has made because it is so a terrorist organization should not be to include killed in the line important, and it is going to give us a exempt from Federal income tax. of duty. Moreover, contributions to such orga- lot better idea of the financial condi- The legislation provides income tax nizations should not be tax deductible. tion of our armed services. It is a good relief. Current law generally excludes Once the Federal Government deter- idea. from tax income received in the year of mines that an entity is a terrorist or- The PRESIDING OFFICER. The Sen- death or in a previous year for soldiers ganization pursuant to certain author- ator’s time has expired. killed in combat zones, and victims of ity—for example, the International The Senator from Iowa. September 11, anthrax and Oklahoma Mr. GRASSLEY. Mr. President, I Emergency Economic Powers Act—a City. separate investigation by the IRS is yield myself such time as I might con- The legislation expands this benefit not necessary. sume. to apply to astronauts who die in the Further, because a terrorist organi- I associate myself with the remarks line of duty. of the Senator from Montana. I share The legislation provides death ben- zation may challenge the Federal gov- Senator PRYOR’s interest in a GAO efit relief. Current law excludes from ernment’s designation under the law study and will be glad to work with income any death benefit paid by the authorizing the designation, recourse him on a letter. And, obviously, a per- U.S. Government to a soldier killed in to the declaratory judgment proce- son such as I, who relies upon the GAO a combat zone or paid by an employer dures of the Tax Code is not appro- for so much study on matters in which to the families of the victims of Sep- priate. I am involved, would not discourage tember 11, the anthrax attacks, or the If a tax-exempt organization’s sus- my colleague from likewise seeking the Oklahoma City bombing. pension is determined to be erroneous, General Accounting Office’s expertise The legislation expands this benefit the provision would allow tax refunds and look forward to what such a study to apply to death benefits paid to the for any overpayments. would show in regard to the treatment families of astronauts killed in the line Lastly, the IRS will be required to of our military personnel. of duty. update its listings of tax-exempt orga- I yield the floor. The legislation provides for estate nizations to take into account organi- The PRESIDING OFFICER. The Sen- tax relief. Current law provides estate zations that have had their exemption ator from Montana. tax relief that effectively lowers the suspended. This will give notice to tax- Mr. BAUCUS. Mr. President, when estate tax rate to 20 percent for the es- payers that contributions to these or- the space program began in 1959 there tates of soldiers killed in combat ganizations are no longer deductible. were only seven astronauts in the en- zones, the victims of September 11, the I urge my colleagues to support the tire country. They all were or had been anthrax attacks or the Oklahoma City Armed Forces Tax Fairness Act of 2003. in the Armed Forces. bombing. Mr. President, this bill includes That was only 44 years ago and since The legislation expands this benefit many important changes in the tax then, much has changed. Today, astro- to apply to the estates of any astro- treatment of income and benefits re- nauts are comprised of Americans from naut killed in the line of duty. ceived by members of our armed forces. every race, creed, color and gender. The best way to honor Columbia’s One provision is particularly important While many still come from the mili- fallen heroes is to promptly pass this for members that face the dual chal- tary, the corps now includes legislation and pledge that the goals lenge of serving their nation while rais- civilian doctors, scientists, and engi- and missions of NASA will live on in ing a family. The bill explicitly states neers. They are our best and our the years to come. that child care subsidies that members brightest. They risk their lives to ad- I urge my colleagues to support the of the military receive shall not be sub- vance our knowledge and under- Armed Forces Tax Fairness Act of 2003 ject to income tax. standing of the world. which includes tax relief for the fami- In 1986, we passed a law which stated On , 2003, seven men and lies of the Space Shuttle Columbia he- that military benefits should not be in- women aboard the space shuttle Colum- roes. cluded in income for tax purposes. The bia lost their lives. LTC Michael P. An- Mr. President, since September 11, statute lists a number of benefits re- derson, U.S. Navy CAPT David Brown, significant progress has been made to ceived by members of the military—

VerDate Jan 31 2003 05:17 Mar 28, 2003 Jkt 019060 PO 00000 Frm 00021 Fmt 0624 Sfmt 0634 E:\CR\FM\G27MR6.039 S27PT1 S4480 CONGRESSIONAL RECORD — SENATE March 27, 2003 housing allowances, medical benefits, and the clerk will read the bill, as weakness of the 1996 provisions. That education assistance, and many others. amended, for the third time. should stop today. But child care subsidies do not appear The amendment (No. 433) was agreed In both this Congress and the last, I on the list. to. introduced legislation with Senator When we passed this law, the Depart- The amendment was ordered to be STABENOW to effectively prevent very ment of Defense did have a program to engrossed and the bill to be read the rich individuals from reducing their assist members of the military in car- third time. taxes by renouncing their U.S. citizen- ing for their children. But the impor- The bill was read the third time. ship. It is a companion to a measure in- tance of this program has increased as Mr. HARKIN. Mr. President, I am troduced by Congressman CHARLES the demographics of the members of very pleased that the Finance Com- RANGEL in 2002. The Joint Tax Com- the military have changed. mittee has moved the important provi- mittee now estimates that it saves $700 There was a time when our forces sions of this bill to the Senate floor million. The savings to the Treasury were primarily young single men. How- and I urge that the bill be passed. are important and the reality that peo- ever, times have changed. Twelve per- The current Tax Code does not ade- ple are able to save on their fair share cent of the forces are women. Over half quately deal with the special cir- of taxes by turning their back on our of the active duty members are mar- cumstances that some in our military country is in some ways even more im- ried. Two-thirds of military spouses face. One of the most important provi- portant. I call them Benedict Arnold. work outside the home. Six percent of sions, in my view, is providing for an Under current law, for 10 years after members are married to another mem- above-the-line deduction for overnight a U.S. citizen renounces his or her citi- ber of the military. And 6 percent are travel expenses of National Guard and zenship with a principal purpose of single parents. Reserve members. avoiding U.S. taxes, the person is taxed Young single soldiers are no longer I have taken a personal interest in a at the rates that would have applied the norm. Recognizing these changes, provision included in this measure that had he or she remained a citizen. In re- the Department of Defense has placed a provides that descendants of current or ality, the tax is nominally on a broader reinforced importance on assisting former active military personnel may based of income and on more types of military families. be members of veterans organizations. transactions. In addition, if the expa- The Department of Defense recog- Without this provision, many local vet- triate dies within 10 years of the expa- nizes the additional challenges faced eran posts which operate food oper- triation, more types of assets are in- by military families as they raise chil- ations will find themselves having to cluded in his or her estate. Unfortu- dren. The average military family pay unrelated business income taxes as nately, the reality is that taxes are moves every two and a half years, mak- the portion of service to members falls. very often not paid. ing it difficult for them to find quality A large share of the local posts in Iowa Once a person has expatriated and re- child care, or friends and neighbors to are very small operations and this moved U.S. assets from U.S. jurisdic- look to for help with child care respon- would be a real burden. I introduced tions, as the Joint Tax Committee re- sibilities. And with work schedules legislation in the last Congress and port notes, it is extremely difficult to that are often long and unpredictable, this one which has been included in the enforce the current rules, particularly help is often necessary. In addition, bill and I appreciate the inclusion of for an entire decade after the citizen- members of the military face the possi- this provision. ship is renounced. The measure I intro- bility of deployment anywhere in the Lastly, I want to discuss the inclu- duced simply provides that the very world at any time. sion of a provision that will effectively act of renouncing one’s citizenship They now operate over 800 child care prevent very rich individuals from re- triggers the recognition of tax. So, centers in the U.S. and abroad. These ducing their taxes by renouncing their rather than collecting tax every time include child development centers for U.S. citizenship. I cannot stress too an asset is sold over the next decade, young children, after-school centers for strongly how disgusting I find this my bill treats all of the assets of an ex- older children, and other family care group’s behavior. Their number is patriate as having been sold the day programs. They provide night and small, but their cost to the Treasury is prior to when the person renounces weekend services as well, to accommo- significant. The Joint Tax Committee their citizenship. The taxes are due up date the often hectic schedules that has estimated the savings of this provi- front rather than over time. In regard military families face. All in all, these sion at $700 million over 10 years. to estate taxes, rather than attempting programs provide care for over 200,000 Back in 1996, I became very inter- to collect the tax from the estate of an children every day. ested in this issue and introduced legis- expatriate not in U.S. jurisdiction, my The cost of these programs varies de- lation on the subject. Senator measure taxes the inheritance of an pending on the income of the parents— Monynihan took the lead in the Senate heir who remain in the U.S. in such a on average, it is about $7,700 per child. and we passed solid legislation at that way as to remove any tax benefit from This cost is shared by the military par- time. Unfortunately, the House re- the renouncement of citizenship. ents and the government, with each sisted the provision and successfully Revenue of $700 million from these paying about half the cost. proposed a mechanism which has prov- very few former citizens is a signifi- The law is unclear about whether en to be grossly inadequate. cant amount of money that must be these benefits are subject to income The Joint Tax Committee staff made up by loyal Americans in the tax. A provision in this bill ends that issued an extensive report on this issue form of higher debt or taxes that confusion. It states that these child earlier this year with considerable co- Americans will face. Last year, the care subsidies, shall not be included in operation from the GAO and the Treas- Senate passed this measure as a part of income, for tax purposes. ury. The report found that ‘‘there is the Armed Forces Tax Fairness Act As the demographics of the members little or no enforcement of the special but, unfortunately, the House opposed of the military have changed, so has tax and immigration rules applicable this provision. the policy of the Department of De- to tax-motivated citizenship relin- I am hopeful that the Senate will fense. Now it is time that we follow quishment and residency termination.’’ strongly resist any effort to weaken with these changes to the tax code. It went to say, ‘‘The Joint Committee these provisions in any way. This is a I compliment Senator LANDRIEU of staff believes that a key reason for in- matter where the Senate should insist Louisiana, who developed this pro- adequate enforcement of the alter- that the loopholes be completely posal, and insisted on its inclusion in native tax regime is the inability to closed. It is an area where lobbyists for this military tax bill. obtain necessary information from in- the Benedict Arnolds should have no It is one more reason the Senate dividuals.’’ With appendices, the report success in their efforts to escape their should pass this legislation today. is over 500 pages in length. But it tax obligations. I yield the floor. comes down to a simple point: A small ∑ Mr. KERRY. Mr. President, I offer The PRESIDING OFFICER. Under number of people continue to evade my strong support for the Armed the previous order, all time is yielded U.S. income taxes by turning their Forces Tax Fairness Act and am proud back, amendment No. 433 is agreed to, back on our country because of the to be a cosponsor of the original bill.

VerDate Jan 31 2003 05:17 Mar 28, 2003 Jkt 019060 PO 00000 Frm 00022 Fmt 0624 Sfmt 0634 E:\CR\FM\G27MR6.042 S27PT1 March 27, 2003 CONGRESSIONAL RECORD — SENATE S4481 This legislation, among other meas- lenges of war. During such times, Con- serve our support. For all these reasons ures, will remedy several provisions in gress has spared no expense to make and more, this legislation deserves to the Tax Code that needlessly penalize sure that our dedicated armed services pass. I urge my colleagues to join me in the members of our Armed Forces. personnel have everything they need to supporting this bill. The act eliminates taxes on military fight and win. We will always meet this Mr. MCCAIN. Mr. President, I am death gratuities. It allows service obligation. proud to be an original cosponsor of members to benefit from the sale of a But the men and women on the bat- the Armed Forces Tax Fairness Act of home as civilian taxpayers now do by tlefield have families back home and 2003, H.R. 1307. This important legisla- exempting up to $250,000 of the revenue there is more that we can do for them. tion provides Congress with the oppor- from the sale of a principal residence I am talking about the families of the tunity to demonstrate our firm resolve even if the owner is away on active troops from Barksdale, Belle Chasse, to support the men and women who duty. It excludes amounts received and Fort Polk in Louisiana, as well as sacrifice so much in the service of our our guardsmen from all across the under the military housing assistance country. I applaud Chairman GRASS- State. Every one of my colleagues rep- program. It expands combat zone filing LEY’s and ranking member BAUCUS’ ef- resents military families. We need to rules to include contingency oper- forts, and those of my colleagues who make sure that we support them as ations. And it takes other sound steps have worked so hard on these initia- that will benefit Americans who have well. That is why today I would like to add tives, in some cases, for many years. I chosen to serve their country so admi- want to particularly thank Senator rably in our armed services. There is my voice of strong support for the Armed Forces Tax Fairness Act of 2003. DEWINE for his stalwart leadership on also a provision to assist the families the above-the-line deduction for ex- of astronauts lost in the tragic crash of I congratulate Senator GRASSLEY, the Finance Committee chairman, and penses incurred by our National Guard the Space Shuttle Columbia. and Reserve service members who have Senator BAUCUS, the ranking member, As a veteran, I hold the dedication to travel great distances for their duty and commitment of our military per- for bringing this bill to the floor today. I urge my colleagues to vote in favor of and training. sonnel in especially high regard. They This long overdue tax benefit for our are putting their time, talent, energy this legislation. This bill contains several provisions true citizen-soldiers is even more im- and, often, their very lives on the line that would reduce taxes for members of portant today considering these facts: for our Nation. For that, I thank them our armed services. The bill would During each of the past 5 years, Re- and am proud to support this legisla- clarify that childcare benefits provided serve and National Guard service mem- tion.∑ to military personnel are to be ex- bers have performed between 12 and Mr. HATCH. Mr. President, I rise cluded from income, a provision based 13.5 million duty days in support of the today to express my support for the on legislation that I introduced earlier Active Force. These numbers are in a military tax bill that is currently in this Congress, S. 235. In addition, the direct contrast to 1990, when 1 million pending before the Senate. bill excludes all death gratuity pay- duty days were performed at a time First, I would like to commend Sen- ments from the income of surviving when there were 25 percent more re- ator GRASSLEY, the chairman of the Fi- family members. Military and Foreign servists. nance Committee, and Senator BAUCUS, Service personnel would receive capital the committee’s ranking Democrat, for Reservists and National Guardsmen gains tax relief when they have to sell their leadership in bringing this legis- currently comprise more than half of a home and move because of reassign- lation to this point. Although this bill the airlift crews and 85 percent of the ment or deployment orders. National has a great deal of support in the Sen- sealift personnel that are needed to Guard and Reserve members would re- ate and in the House, it has not been an move troops and equipment in either ceive an above-the-line deduction for easy process to get it enacted, as the wartime or peacetime operations. In overnight expenses when they travel addition, Reserve medical and con- Senate and House each have different more than 100 miles from home to at- versions of the bill. In fact, this legisla- struction battalions and other special- tend National Guard and Reserve meet- ists are critical to a wide range of oper- tion was passed in the Senate and in ings. There are other important provi- the House last fall in the final days of ations. Efforts by the Reserve compo- sions in this bill that give needed tax nents to move beyond a traditional the 107th Congress. Unfortunately, relief to our families. Congress adjourned before the dif- wartime backup role and to provide I had hoped to include language in peacetime support to active units are ferences in the bills could be worked this bill to give a much-needed tax out. thus desirable. The Naval Reserve and break to the employers for Reserve per- Air Force Reserve components have As we debate this bill today, hun- sonnel. When a reservist gets called up, dreds of thousands of our military men made particularly impressive progress as many have, to go fight in Iraq, em- in this area. and women are in harm’s way in Iraq, ployers have to keep his or her job The Reserve components are per- including 3,000 National Guardsmen open, but do not have to pay a salary forming many vital tasks: From direct and reservists from Utah who have to the reservist while they are gone. involvement in military operations to been called into active service. These This can cause an extreme hardship on liberate Iraq in the air, on the ground, brave individuals are selflessly risking a reservist’s family. While the reservist and on the sea; to guarding nuclear their lives for their country. Most, if receives military pay, in many cases power plants in the United States; to not all, of these people are also making this is much less than their civilian providing support to the war on ter- big financial sacrifices to serve in the pay. Some employers, but not all, will military. While this bill will not come pay the difference between the civilian rorism through guarding, interro- close to compensating our service peo- and military pay, but they do not re- gating, and providing medical service ple for these financial sacrifices, it will ceive any benefit for this act of patri- to detainees in Guantanamo Bay Cuba; bring some basic fairness to their tax otism. I introduced S. 442, the Reserv- to rebuilding schools in hurricane- lives. ist and Guardsmen Pay Protection Act, stricken Honduras and fighting fires in The tax provisions in this bill are to give a 50 percent tax credit to these our Western States; to overseeing civil targeted and modest. They are also patriotic employers. affairs in Bosnia; to augmenting air- very much needed. I urge my col- I regret that we were not able to in- craft carriers short on Active-Duty leagues to quickly join me in sup- clude my bill in the Armed Forces Tax sailors with critical skilled enlisted porting this bill, and I hope the House Fairness Act. But I deeply appreciate ratings during at-sea exercises as well will join with us in working out the the chairman and ranking member for as periods of deployment. differences in the two versions of this their commitment to address my tax I believe that the civilian and uni- legislation so that these modest relief credit proposal in the future reconcili- formed leadership of our Armed Forces measures can be quickly sent to the ation package. I look forward to work- and the Congress must recognize this President and signed into law. ing with them. involvement. At a minimum, Congress Ms. LANDRIEU. Mr. President, our Again our men and women in the must provide equality in benefits for Nation has always risen to the chal- Armed Forces and their families de- Reserve component service members

VerDate Jan 31 2003 05:17 Mar 28, 2003 Jkt 019060 PO 00000 Frm 00023 Fmt 0624 Sfmt 0634 E:\CR\FM\G27MR6.071 S27PT1 S4482 CONGRESSIONAL RECORD — SENATE March 27, 2003 when they put on the uniform and per- Section 101 simply remedies this in- capital gains exclusion available to form their weekend drills or other crit- equality in there 1997 law. It amends most homeowners, due to his or her ical training evolutions. Quality of life the Internal Revenue Code so that frequent postings to different bases, or is not just an Active-Duty obligation members of the uniformed and foreign to combat duty abroad. This bill cor- that Congress must provide. Reserv- services will be considered to be using rects that inequity, and makes it easi- ists, on duty, who resemble their Ac- their house as their main residence for er for all military personnel to sell tive-Duty counterparts during training any period that they are assigned over- their home tax free. evolutions and are deployed at times seas in the execution of their duties. In National Guard and Reserve members around the world, should be treated short, they will be deemed to be using would also benefit under the bill from equally when the administration and their house as their main home, even if an above-the-line deduction for travel Congress provide for quality of life they are stationed in Bosnia, the Per- expenses up to $1,500. This puts those benefits. sian Gulf, in the ‘‘no man’s land,’’ com- who serve on the National Guard and I would like to take a moment to dis- monly called the DMZ between North Reserve on equal footing with those cuss a provision in the bill that I have and South Korea, or anywhere else who travel on company business and do personally worked on for some time. they are assigned. not pay for those expenses out of after- Section 101 would allow members of the With Operation Iraqi Freedom, the tax income. uniformed services, as well as State global war on terrorism, and con- No one who chooses to serve in the Department personnel who are away on tinuing operations in Afghanistan, Bos- Guard or Reserve should have to pay extended duty overseas, to qualify for nia, and Kosovo, our Armed Forces are for a plane ticket or hotel room out of the same tax relief on the profit gen- deployed to an unprecedented number their after-tax income in order to join erated when they sell their main resi- of locations. They are away from their their unit when called up for duty. dence as other Americans. I am pleased primary homes, protecting and fur- This bill also contains a number of to announce that Secretary of State thering the freedoms we Americans smaller, but no less important, provi- Colin Powell fully supports this legis- hold so dear. It is wrong to penalize sions designed to ease the tax burden lation, and this legislation enjoys over- them for doing their duty. Military on military personnel, such as the whelming support by the senior uni- service entails sacrifice. We must do treatment of service academy appoint- formed leadership, the Joint Chiefs of all that we can to ensure that Congress ments as scholarships when personnel Staff, as well as the Office of Manage- is not adding to the burdens service apply to tuition programs and Cover- ment and Budget Director Mitch Dan- men and women bear with an unfair dell Education Savings Accounts. iels, the 31-member associations of the Tax Code. This narrowly tailored rem- I wish we could do more in the Sen- Military Coalition representing 5.5 mil- edy will grant equal tax relief to the ate to keep our soldiers, pilots, and lion veterans, the American Foreign members of our uniformed and foreign sailors out of harm’s way during the Service Association, and the American services, and restore fairness and con- current conflict in Iraq. I wish we Bar Association. sistency to our increasingly complex could pass a bill that guarantees that The average American participates in Tax Code. each and every one of them returns our country’s growth through home This military tax package is a clear home safely to their husbands, wives, ownership. Appreciation in the value of show of support for our men and children, and parents. a home allows everyday Americans to women in uniform. It is the right thing We cannot do that. But by passing participate in our country’s prosperity. to do, and I hope that all my colleagues this bill we can improve their financial Fortunately, the Taxpayer Relief Act will support this critical measure. security and make it easier for them to of 1997 recognized this and provided Mrs. FEINSTEIN. Mr. President, I continue to serve and to protect our this break to lessen the amount of tax rise in support of the Armed Forces country. most Americans will pay on the profit Tax Fairness Act, S. 351. I urge my colleagues to support the they make when they sell their homes. Whether we are at war, as is cur- Armed Forces Tax Fairness Act. Unfortunately, the 1997 home sale pro- rently the case, or at peace, members Ms. CANTWELL. Mr. President, I vision unintentionally discourages of the armed services should not be rise today in support of the Armed home ownership among members of the treated unfairly by the Tax Code as a Forces Tax Fairness Act substitute of- Uniformed and Foreign Services. result of their decision to serve our fered by Senator GRASSLEY. This legis- Under the 1997 Act the taxpayer must county. lation is a critical step towards full tax meet two requirements to qualify for Inequities in the Tax Code that dis- fairness for our military personnel and this tax relief. The taxpayer must: (1) advantage men and women in uniform Foreign Service officers. own the home for at least 2 of the 5 not only make it harder for them to The American people and Congress years preceding the sale, and (2) live in support their families and themselves, stand with our men and women in uni- the home as their main home for at but also threaten our own security by form, and this is the right time to ad- least 2 years of the last 5 years. The making it harder for the armed serv- vance tax parity. second part of this eligibility test unin- ices to recruit talented service men Last Congress, I was proud to cospon- tentionally and unfairly prohibits and women. sor the Foreign and Armed Services many of the women and men who serve We have a responsibility to eliminate Tax Fairness Act of 2002, which in- this country overseas from qualifying any disincentives to serving in the cluded many of the provisions that we for this beneficial tax relief. United States military, and this bill are passing today. I was pleased to co- Constant travel across the United does much to fulfill that goal. sponsor the bill again this Congress States and abroad is inherent in the The two most important provisions when it was reintroduced. uniformed and foreign services. None- in this bill are relaxed rules on the This legislation will bring some com- theless, some members of these serv- treatment of capital gains on the sale monsense changes to the way military ices choose to purchase a home in our of a home by military personnel, and and Foreign Service families are treat- communities, even though they will an above-the-line deduction on travel ed under the Tax Code. It will allow not live there much of the time. Under expenses for members of the National military and Foreign Service families current law, if they do not have a Guard and Reserve. to exclude up to half a million dollars spouse who resides in the house during Anyone who has ever served in the in capital gains from home sales; make their absence, they will not qualify for military or grown up in a military fam- death gratuity benefits tax exempt; ex- the full benefit of the home sales provi- ily knows that frequent travel is a way clude compensation from the Home- sion, because no one ‘‘lives’’ in the of life for those in uniform. A U.S. Ma- owners Assistance Program; provide a home for the required period of time. rine might spend a year or two at deduction for the National Guard’s un- The law is prejudiced against families Camp Pendleton, in my home State of reimbursed travel expenses; clarify that serve our Nation abroad. They , then transfer to Quantico, that dependent care assistance for would not qualify for the home sales and finally end up at Camp Lejeune in military families is exempt from tax- exclusion because neither spouse North Carolina. ation; and support education individual ‘‘lives’’ in the house for enough time to Under current law, that Marine retirement accounts for students at qualify for the exclusion. might not qualify for the home sale service academies.

VerDate Jan 31 2003 05:17 Mar 28, 2003 Jkt 019060 PO 00000 Frm 00024 Fmt 0624 Sfmt 0634 E:\CR\FM\A27MR6.026 S27PT1 March 27, 2003 CONGRESSIONAL RECORD — SENATE S4483 The legislation also extends these and then punish him with increased in the 107th Congress. We should waste benefits to the families of the victims taxes if he decides to sell that home. no more time. Recently, the House of the space shuttle Columbia tragedy. The bill we will pass today rectifies passed a bill to provide tax fairness for The Columbia provisions address many this problem by suspending the resi- members of our Armed Forces. How- of the goals in the Assistance for Fami- dency requirements for military per- ever, the Senate has taken the respon- lies of Space Shuttle Columbia Heroes sonnel that are away from home on ac- sible step of offsetting the costs of Act, which I cosponsored with Senator tive duty assignment. these changes to the tax code. The Sen- BAUCUS. This bill also ensures that the full ate bill will close loopholes that cur- Finally, I would like to emphasize a death gratuity payment made to the rently allow some individuals to re- crucial provision addressing IRS treat- survivors of military personnel killed nounce their American citizenship sim- ment of terrorist organizations. Cur- on duty will be exempt from income ply to avoid paying income taxes. I can rently, when the United States des- tax. The death benefits paid to sur- think of no better way to finance tax ignates an entity a terrorist organiza- vivors are intended to cover funeral relief to the brave patriots in our mili- tion, there is a long delay before the costs and immediate expenses while tary than by forbidding anyone to IRS revokes its tax-exempt status. the family gets back on its feet. The shirk income taxes by renouncing citi- There is no reason to postpone the ac- current death benefit is not large; it is zenship in the United States. The tax tion, but it takes time to update these $6,000. Inexcusably, half of that benefit loophole that rewards such unconscion- lists. This bill will automatically sus- is subject to income tax. This legisla- able behavior ought to be closed and pend the tax-exempt status of des- tion excludes the full value of the now is the time to do so. I urge the ignated terrorist organizations, expe- death benefit from tax. To say that the House of Representatives to approve diting the consequences of the designa- survivors of those recently killed in the Senate bill. tion. Last Congress, Senators GRASS- Iraq deserve to receive the entire death Let me close by thanking all of the LEY and JOHNSON introduced bills with benefit, tax-free, is an extraordinary members of our Armed Forces. Wheth- this practical remedy, but we have yet understatement. er they are currently serving overseas to pass it into law. The House version One of the most important provisions or at home, whether they will see com- of the Armed Forces Tax Fairness Act of this bill is the above-the-line-deduc- bat this week or provide support from does not contain this language, but I tion for overnight travel expenses for far away, all these brave men and will work with my colleagues in both members of the National Guard and women are making America very bodies to ensure that when we send this Reserves. Many of these troops travel proud. This legislation recognizes their bill to the President, this important more than 100 miles to serve with their sacrifices. I urge my colleagues to sup- provision is included. units. They have to pay the costs of port the bill and hope that Congress Mr. President, the Armed Forces Tax traveling to their base; and many of will send it to the President without Fairness Act supports our men and them also have to pay for their meals delay. women in uniform during these trying and lodging while away from home. times. I urge my colleagues to give it Under current law, these expenses can f their full support. be deducted from income only if the in- I yield the floor. dividual itemizes deductions on his or EXPRESSING GRATITUDE OF Mr. ROCKEFELLER. Mr. President, I her tax return. This onerous require- UNITED STATES TO NATIONS rise today with great pride to support ment prevents many eligible individ- PARTICIPATING IN COALITION the Armed Forces Tax Fairness Act. As uals from taking advantage of the de- TO DISARM IRAQ I speak, America’s military is fighting duction. in the dangerous and inhospitable The bill we will pass today ensures The PRESIDING OFFICER. Under deserts of Iraq. And when I watch the that the expenses associated with over- the previous order, the measure is laid remarkable news coverage of the night travel to attend National Guard aside, and the Senate will proceed to progress in Iraq, I am awed by the and Reserve meetings can be deducted the consideration of S. Con. Res. 30, skills, dedication, and courage of our even if a person does not itemize deduc- which the clerk will report. fighting forces. Passing this legislation tions. This provision is expected to The senior assistant bill clerk read as is the least that we can do to show save National Guardsmen and reserv- follows: those brave men and women that we ists more than $800 million over the A concurrent resolution (S. Con. Res. 30) support them, we are proud of them, next 10 years. We have seen how val- expressing the sense of Congress to commend and their nation is grateful for their iantly these members of our Armed and express the gratitude of the United sacrifice. Forces are serving—leaving their States to the nations participating with the This Congress ought not to pretend homes, families, and regular jobs, to United States in the Coalition to Disarm that the bill we are considering is some serve in Iraq, Afghanistan, or wherever Iraq. altruistic gift to the men and women their Commander in Chief sends them. The PRESIDING OFFICER. There serving our country in the military. It is the least we can do to minimize will now be 1 hour of debate equally di- Rather, today we will pass legislation the financial burden this service places vided between the chairman and rank- that restores basic fairness to the tax on them and their families. ing member of the Foreign Relations code. We demand extraordinary sac- I have highlighted just a few of the Committee. rifices of our soldiers, sailors, airmen, important provisions of this bill. Let The Senator from Indiana. and marines. They are often stationed me speak for a moment about how im- Mr. LUGAR. Mr. President, I yield far away from their families. They are portant this legislation will be for my myself such time as I may require on frequently uprooted and forced to sell own State of West Virginia. West Vir- this initial statement. their homes on short notice. And in a ginians have a proud tradition of serv- I ask unanimous consent that Sen- military increasingly dependent on the ing in the military. Tens of thousands ators WARNER and ALLEN be added as National Guard and Reserves, we ask of West Virginians are serving on Ac- cosponsors of S. Con. Res. 30. some of our vital troops to travel great tive Duty in our Army, Navy, Air The PRESIDING OFFICER. Without distances at their own expense to train Force, and Marine Corps. More than objection, it is so ordered. with their units. 3,000 West Virginia members of the Na- Mr. LUGAR. I rise in support of this Often the burden of these sacrifices is tional Guard and Reserves have been resolution thanking those nations par- increased by the inflexibility of the activated. I am pleased to be able to ticipating with the United States in Tax Code. For example, a serviceman support legislation that recognizes the ‘‘Coalition to Disarm Iraq.’’ I am stationed in Saudi Arabia obviously their sacrifices and rewards their serv- pleased that this resolution enjoys the cannot meet the residency require- ice. strong support of the ranking member ments associated with the capital gains The Senate passed legislation very of the Committee on Foreign Rela- tax exclusion for his house in the similar to this bill last year. I was ex- tions, the Senator from Delaware, and States. It is spectacularly unfair for us tremely disappointed that the House of the leadership on both sides of the to send a soldier away from his home, Representatives did not act on that bill aisle.

VerDate Jan 31 2003 05:17 Mar 28, 2003 Jkt 019060 PO 00000 Frm 00025 Fmt 0624 Sfmt 0634 E:\CR\FM\A27MR6.039 S27PT1